About the Horned King's goals. In his introductory monologue he openly states, talking to the skeletons he plans to reanimate: "Then you will worship me! Me... Oh, my soldiers. How long I have thirsted to be a god among mortal men." Right ? His plan in a nutshell is to create an immortal army of undead skeleton warriors to kill everybody in the world, and be forever worshipped as a god by his people of undeads. Right ? Then his plan has got a Fatal Flaw from the beginning and the Horned King would never have been happy: his wish is to be "a god among mortal men", but he plans to replace all mortal men with his… immortal soldiers. He obviously was too mad to think things all the way through…
Gurgi, before his Heroic Sacrifice, says "Gurgi won't let his friend die! Taran has many friends. Gurgi has no friends." But you just referred to Taran as your friend...
More like "Fridge Sadness". Gurgi is well aware that Taran doesn't think too highly of him (to put it mildly), and yet he's still the closest thing to a friend Gurgi has.
Friendship isn't entirely mutual; one person may consider another a friend while the other doesn't think that much of them. Alice can be Bob's friend without Bob being Alice's. Gurgi is just showing awareness of this paradox.
And even if Taran did like Gurgi at all, maybe he just meant "no other friends".
So, the witches state that they can only give up the Cauldron if given something in trade. Gurgi offers his apple core, which one of the witches takes. So shouldn't that mean that they get the Cauldron without having to surrender the sword, since their offer was accepted?
According to the witches, Gurgi's sacrifice has destroyed the Cauldron's power to raise the dead. It's powerless now except for its innate indestructibility, but the witches are still quite eager to take it back. Either they were lying about it losing its powers, or they grossly overpaid (it's implied bringing Gurgi back to life was quite an effort), or they were keeping up an 'evil witch' front while actually cutting poor Gurgi a break.